Collins Stewart's FT claim fails

THE High Court has thrown out a £230m damages claim brought by City stockbroker Collins Stewart against the Financial Times newspaper.

The brokers sued the FT over an article last summer that contained details of allegations made by James Middleweek, a former analyst for the firm.

The £230m figure represented the drop in the value of the firm after its shares slumped following publication of the article.

The judge, Mr Justice Tugendhat, said that a trial on this part of the claim would have been a ?waste of time‘ – but added that a separate £37m claim for loss of business resulting from the article will be tried at a future date.

FT editor Andrew Gowers reacted with delight to the judgement. He declared:

'It would have been a very dark day for journalism and for a free press if publishers were to be held liable for a drop in the share price following publication of an article reporting on company events.'

The FT‘s victory in its efforts to have the claim thrown out is highly significant. Media analysts believe that a win for Collins Stewart could have led to the newspaper‘s closure.

It would have also severely constrained the ability of financial journalists elsewhere to report news that caused companies‘ share prices to fall because they would have been left wide open to legal action for the loss of corporate value.

Earlier this month, Desmond Browne QC, one of the FT‘s legal team, said Collins Stewart chief executive Terry Smith seemed 'determined to get into the Guinness Book of Records' with his huge claim for loss of value caused by the drop in the firm‘s share price.

The FT added that it would continue to defend itself against Collins Stewart‘s claims. A libel trial following the publication of the article, 'Reputations on the Line at Collins Stewart‘, will now take place in April.

Collins Stewart said today‘s judgement did not in any way affect its libel claim and said the firm intended to proceed with it.